The globallandscape post Covid-19 is all set to be a refashioned one. Numerous thinkers,authors and analysts seem to be gravitated towards this concern, as to whatlies onto the other side of the Pandemic. With the result, multitudinousopinions have surfaced, leaving a common man in lurch. Some profess that thenew world will be radically different while others contend the new world-orderwill be led by the Chinese. Many predict the death of globalization, but somesanguine ones see a new era of globalization. Foreign Affairs Magazine, TheHill, The Washington Times, Modern Diplomacy, BBC, Foreign Policy andmultifarious policy institutes and media houses are airing prophesies of thosewho matter. The debate encompasses the advent of turbocharged nationalism andthe demise of free-trade.
However,once this public-health crisis is dealt with, a bigger threat that looms largeover our heads will be the economic slump – which again, many contest, will beakin to the 2008 Sub-Prime Mortgage Crisis while the alarmists compare it to muchworse- The Great Depression of 1929. I believe that if we are back to businessin less than 6 months, it won’t be as painful, since the aggregate demand willhelp economy bounce back. The economic bubbles will burst, which will result inreal & healthy growth. On the contrary, if this calamity protracts, it willend international cooperation of any hue, and give us an anarchic world. Thiscan’t be emphasized enough that Sino-American cooperation will be aforce-multiplier in humanity’s battle against the Virus. Instead, theirfriction has increased manifold since both sides accuse each other, at variouslevels, for this ruckus. If this persists, each country will go its own way.Going down the annals of history, the United States and the Soviet Union collaboratedduring the Cold War by working together on the Non-proliferation Treaty and onarms control. If this lesson is not learned, we are up for a catastrophe.
Since thediscourse is spread all over, the new world order needs to be compartmentalizedinto two sections: A). China vs. United States for the world leadership and B).Globalization vs. Nationalization.
A). Who will lead the world?
Will theUnited States continue its primacy or will China take over, after Corona virusends? Well, I don’t think Corona will change the trajectory of the Sino-UStussle. It will merely catalyze the process that had already set in. It willaccelerate the transition from US-centric world to a China-centric one. WaningAmerican leadership is now conspicuous like never before. This has more to dowith the lack of American will to lead and less to do with its capacity to doso. America still has an unrivalled military strength and could havecapitalized on its strategic importance, but neither their leadership nor theirpeople seem to be as motivated as they were, after the World-War-2. Donald Trump’s ‘America First’ policy is a good example. They want morestability at home; they want a wider healthcare-net and old age pensions; theyare more into having good domestic governance. This is what a normal nationdesires. This is not, however, how an ambitious super-power thinks. Being aDaddy takes sacrifice that can give you a moral high ground to patronize orlet’s say, bully weaker countries, as and when you want to.
Let’s lookat the other side of the globe. When Donald Trump imposed a travel ban onEurope, the Chinese provided the European Union and Africa, with 500,000testing kits, thousands of respirators, 200,000 advanced masks, and 17 tones ofmedical supplies. Quoting a newspaper, President Xi told Italian Prime MinisterGiuseppe Conte that he hoped to establish a Health Silk Road, as part ofChina’s global One-Belt-One-Road Initiative. Although the Virus came fromWuhan, China has flattened the curve. It’s going back to normal, demonstratingthe efficacy of its prowess, and is helping 89 countries. It may not be a Daddyyet, but it for sure has become a Big-Brother to Europe, Africa, and many othernations. From being mired with Corona cases a few months ago, it is nowmounting a diplomatic charm offensive, playing the Good Samaritan andundermining the US by becoming the global first-responder. The SerbianPresident said, ”European solidarity does not exist. This was a fairy-tale.The only country that can help us in this hard situation is the People’sRepublic of China. To the rest, thanks for nothing”.
With theascent of China, the world order will transfigure especially for Iran, Pakistan(especially on the Kashmir question), and Palestine – since Israel draws mostof its strength from across the Pacific (i.e. It will be lonelier). By the way,China has sent its aid (10,000 Corona virus kits) to the Palestinians too. Bethat as it may, I do not think that China will replace the United States as thesole super-power. It will not be a zero-sum game. The void that the US willleave cannot be filled by any one country, China included. As I said earlier,that it would be more of a China-centric world, insinuating that Chinese willhave an upper hand in many areas. It does not mean we will have a uni-polarworld, with China calling all the shots. And I reiterate, all this was anywayon the cards, but the current cataclysm catalyzed it.
B). Globalization vs. Nationalization:
AlthoughCovid-19 is itself a proof of globalization and irrelevance of borders, but theresponse of global governance has been almost zero. World Health Organization,for example, should have been at the center stage. It is not. The UnitedNations should have been using its relevant organ(s) to spearhead this waragainst the invisible enemy, but it is not. Faltering global cooperationhas brought nation-states onto the forefront. The European Union, the US, andNATO have been debilitated by this pandemic. The refugee crisis will reach acrescendo, as there would be more resistance to mass-immigrations and theywould be stuck in poorer countries which can ill-afford them. This would leadweaker nations to collapse.
There wouldbe a massive dent to globalization. All the countries are a part of a globalsupply-chain, but this catastrophe has dismantled entire manufacturinginfrastructure. It’s quite axiomatic for the companies to reassess and remodeltheir multinational supply chains. This would entail that they would bringtheir manufacturing back from overseas. Just-in-Time (JIT) inventory system,which had eliminated warehouses, will be enfeebled. Undoubtedly, this would cuttheir profits but the system will be more resilient and stable. Again, eventhis is not exclusively due to Covid-19 which has simply sped up thistransmutation. This phenomenon was panning out anyway, due to the risingChinese labor cost, Trump’s trade war and other factors.
The conceptof globalization, taking a hit, cannot be better explained without exemplifyingthe failure of European project. The EU was touted as the best model byglobalists. Despite being so, it’s in mess right now. In fact, there is no EU.All the nations-big or small, rich or poor are fighting their own war.The Italian leadership, which hitherto bore the brunt of it the most, saidthat if Europe does not rise up to this unprecedented challenge, the wholeEuropean structure loses its raison detre’ for the people. And obviously,Europe has not risen as an entity. So yes, European project has failed. Liberalcapitalism is bust. The liberal international order will become less liberaland less ordered.
This willstrengthen the state and nationalism. The governments will become morepowerful. At the same time, I presume this too won’t last long. This would be afeature of immediate future that we would have to navigate through. Thebusinesses cannot stay cautious for long, at the cost of their cherishedprofits; more so, when the technology infrastructure has been tailor-made toenhance globalization, free markets and capitalism.
Conclusion
It seemspretty clear that China is to gain much out of it. Her plans were alreadyslated to achieve global leadership- OBOR & its Health Silk Road wing, forinstance, but Covid-19 has been a shot in its arm. The process stands hastened.Not to forget, it cannot be a sole super-power, in its strictest sense. Itcannot completely fill in the void the United States leaves; at least, not inthe near future. What seems evident though, is the departure of America’ssingular supremacy. Some may counter-argue that US took the charge of the worldright after the World War-2, but the power today is more diversified, and moreinclined towards the East rather than the West.
As far asthe markets and economy are concerned, if this disease does not prolong itsstay, aggregate demand will rebound and it won’t be as painful as we are makingit out to be. And the pain won’t stay for as long as cynics are saying it wouldbe. Again, it’s true only IF it does not remain with us for far too long.
Albeitglobalization will take a back seat for now and this would bolster domesticgovernments, who would have more control on private businesses, but I feel thenatural tendency of profit maximization won’t let that remain for long. Thisyear would be the worst, followed by its after-effects in the next year.Humanity will survive and thrive. This is not the end. Let’s not let ourconfidence atrophy.